It is necessary to accelerate efforts to achieve the coal gasification target

India is rapidly advancing coal-based gas production to reduce oil imports and achieve net-zero goals, with a target of 100 million tons (MT) of coal gasification capacity by 2030. Major projects include Surface Coal Gasification (SCG) for fertilizer and steel production, along with Coal Bed Methane (CBM) extraction, backed by ₹8,500 crore in government incentives, with investments exceeding ₹4 trillion.

Major Projects & Players:

Talcher Fertilizer Plant: A joint venture by Coal India (CIL), RCF, GAIL, and FCIL, utilizing coal gasification.

Jindal Steel & Power (JSPL): Operates an Angul, Odisha plant using coal-based syngas for Direct Reduced Iron (DRI) production.

CIL Collaborations: CIL is collaborating with BHEL and GAIL for Coal-to-Synthetic Natural Gas (SNG) and ammonium nitrate projects (e.g., in West Bengal and Odisha), expected to commission by 2029-30.

New Era Clean Tech: Setting up a 5-MTPA project in Maharashtra.

Incentives: The government has provided a 50% revenue share rebate for coal used in gasification and launched a ₹8,500 crore viability gap funding scheme for PSUs and private players.

Coal Bed Methane(CBM): an unconventional natural gas, is extracted from coal seams. Around 6 blocks are in production, contributing about 2.27 million metric standard cubic meters per day (MMSCMD) as of March 2025. Reliance Industries (RIL) operates in Shahdol, Madhya Pradesh, being a key player for it.

Is currently only about 3–5% of China’s (which is approximately 80 MMTPA). While both countries began exploring the technology around the same time, China has achieved massive scale by utilizing coal for 90% of its ammonia and 70% of its methanol production, whereas India remains heavily import-dependent

The primary reasons for this disparity include:

1. Inferior Coal Quality (High Ash Content)

The Ash Challenge: Indian thermal coal typically contains 35–50% ash, compared to the 10–15% global average and significantly lower levels in Chinese coal.

Technical Hurdles: High ash causes “clinkering” (sticky residue) that chokes standard gasifiers. Most globally established technologies (like those from the West or even China) are designed for coal with less than 25% ash.

Lack of Beneficiation: China washes 70–75% of its raw coal to improve quality; India washes almost none of its domestic thermal output.

2. Strategic Persistence vs. Market Sensitivity

China’s “Energy Security” Focus: China viewed coal gasification as a strategic shield against oil shocks and stayed focused regardless of market fluctuations.

India’s Cyclical Interest: Experts note that India’s interest in coal gasification often wanes when global crude oil prices decline, making expensive gasification projects seem less economically viable.

3. Investment and Infrastructure Scale

Capital Intensity: China invested heavily in the capital and skills required for coal-to-chemicals over decades.

Mining Depth: Chinese operations involve deep underground mining (up to 3km), whereas India primarily relies on opencast mining, leaving vast underground reserves unexploited.

Technology Gap: While China successfully adapted Western gasifiers and then developed its own, India is still in the phase of developing indigenous technology suitable for its unique high-ash coal.

4. Policy and Execution “Gaps”

Industrial Linkage: Early Indian R&D lacked strong industrial linkages and consistent funding.

Business Case Ambiguity: High capital costs (CAPEX) and the lack of a proven, large-scale commercial business case in the Indian context have deterred private investment until recently.

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